Illinois has become the second state to tax prediction markets after Gov. JB Pritzker signed the FY2027 budget bill. The new levy applies to sports related exchange wagers starting July 1.
Good To Know
Illinois has moved prediction markets into its sports betting tax framework without raising general tax rates for residents.
Pritzker signed SB 3019 as part of the state FY2027 budget package. The bill adds prediction markets to the Illinois Sports Wagering Act and creates a tax on exchange wagers tied to sporting events.
That means prediction market operators taking sports event wagers in Illinois will face a tax based on wager volume. The rate starts at 1.75% on the first 5 million wagers placed during a fiscal year. Any wagers after that point will be taxed at 3.5%.
The General Assembly approved the measure earlier in June. With Pritzker signature now in place, the tax begins July 1.
The law comes as more states examine how prediction markets fit beside licensed sports betting. Operators such as Kalshi and Polymarket have argued in several markets that event contracts fall under federal exchange rules. State officials, meanwhile, continue to treat sports related contracts more like gambling products when they reach local consumers.
Illinois chose a tax route through the budget rather than a standalone ban. The state already has one of the more aggressive sports betting tax systems in the country, including a progressive tax on operator revenue and a per wager tax for online sportsbooks.
The new prediction market tax adds another layer to that wider betting framework. It also gives Illinois a direct revenue path if sports event contracts continue to grow.
Pritzker framed the wider budget around household costs and fiscal stability.
“I’m proud to sign Illinois’ eighth consecutive balanced budget – one that lowers costs for everyday Illinoisans, protects our state’s fiscal health, and continues our economic progress,” said Governor Pritzker. “Working families need relief, and this budget delivers by investing in housing, food access, education, our healthcare system, and other necessities that make life more affordable.”